HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Corporate Information
Directors’ Review Report
Condensed Interim Balance Sheet
Condensed Interim Profit and Loss Account
Condensed Interim Statement of Comprehensive Income
Condensed Interim Cash Flow Statement
Condensed Interim Statement of Changes In Equity
Notes to and Forming Part of the Condensed Interim Financial Information
Offices In Pakistan
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Contents
1
Independent Auditors’ Report 5
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Corporate Information
BOARD OF DIRECTORS
Mr. Kunwar Idris
Chairman
Mr. Harukazu Yamaguchi
Non Executive Director
Mr. Humayun Murad SI
Non Executive Director
Ms. Nargis Ghaloo
Non Executive Director
Mr. Shahid Usman
Independent Non Executive Director
Mr. Kazuhito Inoue
Non Executive Director
Mr. Hiroshi Nishio*
Non Executive Director
Mr. Shaheen Amin
Chief Executive
AUDIT COMMITTEE
Mr. Shahid Usman
Chairman
Mr. Harukazu Yamaguchi
Member
Mr. Kazuhito Inoue
Member
CREDIT COMMITTEE
Mr. Shaheen Amin
Member
Mr. Ramon Alfrey
Member
Mr. Amjad Iqbal
Member
HUMAN RESOURCE AND
REMUNERATION COMMITTEE
Mr. Harukazu Yamaguchi
Member
Mr. Kazuhito Inoue
Member
Mr. Shaheen Amin
Member
Ms. Nargis Ghaloo
Member
CHIEF FINANCIAL OFFICER
Mr. Ramon Alfrey
COMPANY SECRETARY
Ms. Effat Assad
HEAD OF INTERNAL AUDIT &
SECRETARY TO AUDIT
COMMITTEE
Ms. Maryam Aziz
THE MANAGEMENT TEAM
Mr. Amjad Iqbal
General Manager - Credit
Mr. Arshad Abbas
General Manager - Commercial Vehicle
Mr. Hiralal Bharvani
General Manager - Treasury & Consumer Auto
Mian Faysal Riaz
General Manager - Corporate Lease
Mr. Irfan Ahmed
General Manager & Branch Controller
(Northern Region)
Mr. Ayub Khan
General Manager - Special Assets
Management and Administration
Ms. Aseya Qasim
General Manager - Micro Finance I Agri Lease
Mr. Muhammad Kashif Yaqoob
General Manager - Corporate, Planning &
Communication
Mr. Masood Ahmed Zia
General Manager - Human Resource
Mr. M. Ismail Khan
Head - Business Control
Mr. M. Moizuddin
Head - Information Systems
Mr. Mohsin Siraj
Head - Law Division
Mr. Shakir Vasi
Head - Operating Lease
Mr. Asad Ali Sheikh
Head - Compliance
SHARIAH ADVISOR
Mufti Ibrahim Essa
REGISTERED OFFICE
Islamic Chamber of Commerce Building,
Ground Floor, ST-2/A, Block 9, KDA
Scheme No.5, Clifton, Karachi-75600
HEAD OFFICE
ORIX Building, Plot No.16, Sector
No.24, Korangi Industrial Area,
Karachi-74900
CREDIT RATING BY THE PAKISTAN
CREDIT RATING AGENCY
Long term entity rating AA+
Short term entity rating A1+
BANKS AND LENDING
INSTITUTIONS
AlBaraka Bank (Pakistan) Limited
Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Bank Al Habib Limited
Bank Islami Pakistan Limited
Bank of Khyber
Burj Bank Limited
ECO Trade & Development Bank, Turkey
Faysal Bank Limited
Habib Bank Limited
Habib Bank Limited-Islamic Banking
Habib Metropolitan Bank Limited
JS Bank Limited
NIB Bank Limited
Pak China Investment Company Limited
Pak Oman Investment Company Limited
Standard Chartered Bank (Pakistan)
Limited
The Bank of Punjab
The Bank of Tokyo - Mitsubishi UFJ,
Limited
United Bank Limited
AUDITORS
A.F. Ferguson & Company
Chartered Accountants
State Life Building No. 1-C,
I.I Chundrigar Road, P.O Box 4716,
Karachi-74000, Pakistan
LEGAL ADVISORS
M/s Mansoor Ahmad Khan & Co.
M/s Walker Martineau & Saleem
REGISTRAR AND SHARE
TRANSFER OFFICE
THK Associates (Private) Limited
2nd Floor, State Life Building No.3
Dr. Ziauddin Ahmed Road,
Karachi - 75530
2
* The appointment of Mr. Hiroshi Nishio as a director, is subject to approval of Securities and Exchange Commission of Pakistan
Corporate Information
3
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Corporate Information
BOARD OF DIRECTORS
Mr. Kunwar Idris
Chairman
Mr. Harukazu Yamaguchi
Non Executive Director
Mr. Humayun Murad SI
Non Executive Director
Ms. Nargis Ghaloo
Non Executive Director
Mr. Shahid Usman
Independent Non Executive Director
Mr. Kazuhito Inoue
Non Executive Director
Mr. Hiroshi Nishio*
Non Executive Director
Mr. Shaheen Amin
Chief Executive
AUDIT COMMITTEE
Mr. Shahid Usman
Chairman
Mr. Harukazu Yamaguchi
Member
Mr. Kazuhito Inoue
Member
CREDIT COMMITTEE
Mr. Shaheen Amin
Member
Mr. Ramon Alfrey
Member
Mr. Amjad Iqbal
Member
HUMAN RESOURCE AND
REMUNERATION COMMITTEE
Mr. Harukazu Yamaguchi
Member
Mr. Kazuhito Inoue
Member
Mr. Shaheen Amin
Member
Ms. Nargis Ghaloo
Member
CHIEF FINANCIAL OFFICER
Mr. Ramon Alfrey
COMPANY SECRETARY
Ms. Effat Assad
HEAD OF INTERNAL AUDIT &
SECRETARY TO AUDIT
COMMITTEE
Ms. Maryam Aziz
THE MANAGEMENT TEAM
Mr. Amjad Iqbal
General Manager - Credit
Mr. Arshad Abbas
General Manager - Commercial Vehicle
Mr. Hiralal Bharvani
General Manager - Treasury & Consumer Auto
Mian Faysal Riaz
General Manager - Corporate Lease
Mr. Irfan Ahmed
General Manager & Branch Controller
(Northern Region)
Mr. Ayub Khan
General Manager - Special Assets
Management and Administration
Ms. Aseya Qasim
General Manager - Micro Finance I Agri Lease
Mr. Muhammad Kashif Yaqoob
General Manager - Corporate, Planning &
Communication
Mr. Masood Ahmed Zia
General Manager - Human Resource
Mr. M. Ismail Khan
Head - Business Control
Mr. M. Moizuddin
Head - Information Systems
Mr. Mohsin Siraj
Head - Law Division
Mr. Shakir Vasi
Head - Operating Lease
Mr. Asad Ali Sheikh
Head - Compliance
SHARIAH ADVISOR
Mufti Ibrahim Essa
REGISTERED OFFICE
Islamic Chamber of Commerce Building,
Ground Floor, ST-2/A, Block 9, KDA
Scheme No.5, Clifton, Karachi-75600
HEAD OFFICE
ORIX Building, Plot No.16, Sector
No.24, Korangi Industrial Area,
Karachi-74900
CREDIT RATING BY THE PAKISTAN
CREDIT RATING AGENCY
Long term entity rating AA+
Short term entity rating A1+
BANKS AND LENDING
INSTITUTIONS
AlBaraka Bank (Pakistan) Limited
Allied Bank Limited
Askari Bank Limited
Bank Alfalah Limited
Bank Al Habib Limited
Bank Islami Pakistan Limited
Bank of Khyber
Burj Bank Limited
ECO Trade & Development Bank, Turkey
Faysal Bank Limited
Habib Bank Limited
Habib Bank Limited-Islamic Banking
Habib Metropolitan Bank Limited
JS Bank Limited
NIB Bank Limited
Pak China Investment Company Limited
Pak Oman Investment Company Limited
Standard Chartered Bank (Pakistan)
Limited
The Bank of Punjab
The Bank of Tokyo - Mitsubishi UFJ,
Limited
United Bank Limited
AUDITORS
A.F. Ferguson & Company
Chartered Accountants
State Life Building No. 1-C,
I.I Chundrigar Road, P.O Box 4716,
Karachi-74000, Pakistan
LEGAL ADVISORS
M/s Mansoor Ahmad Khan & Co.
M/s Walker Martineau & Saleem
REGISTRAR AND SHARE
TRANSFER OFFICE
THK Associates (Private) Limited
2nd Floor, State Life Building No.3
Dr. Ziauddin Ahmed Road,
Karachi - 75530
2
* The appointment of Mr. Hiroshi Nishio as a director, is subject to approval of Securities and Exchange Commission of Pakistan
Corporate Information
3
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Directors' Review Report
The Board of Directors of ORIX Leasing Pakistan Limited (the Company) is pleased to present the unaudited condensed interim financial statements for the half year ended December 31, 2015.
Most national macroeconomic indicators continued to exhibit improvement in the first half of the current financial year. Inflation remained under control easing the monetary policy. Lower interest rates and improved business environment encouraged companies to avail credit not for working capital alone but also for capital expenditure.
The Company recorded a net profit of Rs. 324.9 million for the half year ended December 31, 2015 compared to Rs. 321.9 million earned in the same period last year. Prior period’s profit included a one-time gain on disposal of investments of Rs. 75.7 million which was not available in the current year. Earnings per share were Rs. 3.96 compared to Rs. 3.92 in the same period last year.
Business volume for the half year at Rs. 7.420 billion was 19% higher than Rs. 6.234 billion disbursed during the first half of last year. Improving business confidence in the Country together with aggressive marketing led to higher disbursements.
The Company’s core business revenue from finance lease at Rs. 1.154 billion was 7% more than Rs. 1.083 billion in the comparative period last year despite reduction in interest rates during the period. Revenue from operating lease at Rs. 284.7 million was 22% lower than Rs. 365.2 million in the same period last year chiefly because of sharp decline in demand for generators due to gas shortage.
Mark-up income on term finance at Rs. 240.2 million (December 2014: Rs. 224.1 million) was 7% higher on improved disbursements of vehicle finance and micro finance. Other income at Rs. 104.6 million (December 2014: Rs. 180.4 million) was 42% lower because the previous period’s income included a non-recurring gain of Rs. 75.7 million on sale of investments. Share of profit from overseas associated companies at Rs. 127.5 million (December 2014: 137.4 million) decreased by 7% due to lower earnings by the associate companies in oil dependent economies.
Finance cost at Rs. 823.9 million (December 2014: Rs. 853.1 million) was 3% lower on a borrowing portfolio of Rs. 17.7 billion (December 2014: Rs. 15.0 billion). Reduction in interest rate helped in containing the finance cost.
Administrative and general expenses at Rs. 408.4 million (December 2014: Rs. 386.1 million) were 6% higher than in the comparative period last year mainly due to annual revision in salaries of staff. Direct cost of lease, which primarily consists of depreciation, maintenance and insurance costs of operating lease, decreased by 18% to Rs. 207.6 million against Rs. 253.7 million in the comparative period last year. The reduction reflects lower business activity in the operating lease segment.
Provision against lease and loan losses for the current period at Rs. 49.7 million was 34% lower than Rs. 75.1 million provided in the comparative period. Tight credit controls and settlement of long outstanding contracts resulted in lower provisioning for the current period. Recoveries, particularly against operating lease receivable, resulted in reversal of other provisions.
As explained in note 22, the Company will be exiting its e-business segment in the near future. e-business assets have been classified as held for sale at recoverable value and an impairment loss of Rs. 30.7 million has been recorded against these assets in the current period.
The Pakistan Credit Rating Agency has maintained the Company’s long term rating of AA+ (Double A Plus) and short term rating of A1 Plus (A One Plus). These ratings denote the lowest expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.
Looking forward, improved economic conditions, favourable interest rates and renewed business confidence are expected to increase the demand for credit to the gain of the Company.
On behalf of the Board
Shaheen AminChief Executive Dated: February 22, 2016
4
Independent Auditors’ Report To The Members On Review Of Condensed Interim Financial Information
Introduction
We have reviewed the accompanying condensed interim balance sheet of ORIX Leasing Pakistan Limited as at December 31, 2015 and the related condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the notes forming part thereof (here-in-after referred to as ‘the condensed interim financial information’) for the half year then ended. Management is responsible for the preparation and presentation of this condensed interim financial information in accordance with the approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this condensed interim financial information based on our review. The figures of the condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended December 31, 2015 and December 31, 2014 have not been reviewed, as we are required to review only the cumulative figures for the half year ended December 31, 2015.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as of and for the half year ended December 31, 2015 is not prepared, in all material respects, in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting.
Chartered Accountants
Engagement Partner: Rashid A. Jafer
Dated: February 24, 2016
Karachi.
5
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Directors' Review Report
The Board of Directors of ORIX Leasing Pakistan Limited (the Company) is pleased to present the unaudited condensed interim financial statements for the half year ended December 31, 2015.
Most national macroeconomic indicators continued to exhibit improvement in the first half of the current financial year. Inflation remained under control easing the monetary policy. Lower interest rates and improved business environment encouraged companies to avail credit not for working capital alone but also for capital expenditure.
The Company recorded a net profit of Rs. 324.9 million for the half year ended December 31, 2015 compared to Rs. 321.9 million earned in the same period last year. Prior period’s profit included a one-time gain on disposal of investments of Rs. 75.7 million which was not available in the current year. Earnings per share were Rs. 3.96 compared to Rs. 3.92 in the same period last year.
Business volume for the half year at Rs. 7.420 billion was 19% higher than Rs. 6.234 billion disbursed during the first half of last year. Improving business confidence in the Country together with aggressive marketing led to higher disbursements.
The Company’s core business revenue from finance lease at Rs. 1.154 billion was 7% more than Rs. 1.083 billion in the comparative period last year despite reduction in interest rates during the period. Revenue from operating lease at Rs. 284.7 million was 22% lower than Rs. 365.2 million in the same period last year chiefly because of sharp decline in demand for generators due to gas shortage.
Mark-up income on term finance at Rs. 240.2 million (December 2014: Rs. 224.1 million) was 7% higher on improved disbursements of vehicle finance and micro finance. Other income at Rs. 104.6 million (December 2014: Rs. 180.4 million) was 42% lower because the previous period’s income included a non-recurring gain of Rs. 75.7 million on sale of investments. Share of profit from overseas associated companies at Rs. 127.5 million (December 2014: 137.4 million) decreased by 7% due to lower earnings by the associate companies in oil dependent economies.
Finance cost at Rs. 823.9 million (December 2014: Rs. 853.1 million) was 3% lower on a borrowing portfolio of Rs. 17.7 billion (December 2014: Rs. 15.0 billion). Reduction in interest rate helped in containing the finance cost.
Administrative and general expenses at Rs. 408.4 million (December 2014: Rs. 386.1 million) were 6% higher than in the comparative period last year mainly due to annual revision in salaries of staff. Direct cost of lease, which primarily consists of depreciation, maintenance and insurance costs of operating lease, decreased by 18% to Rs. 207.6 million against Rs. 253.7 million in the comparative period last year. The reduction reflects lower business activity in the operating lease segment.
Provision against lease and loan losses for the current period at Rs. 49.7 million was 34% lower than Rs. 75.1 million provided in the comparative period. Tight credit controls and settlement of long outstanding contracts resulted in lower provisioning for the current period. Recoveries, particularly against operating lease receivable, resulted in reversal of other provisions.
As explained in note 22, the Company will be exiting its e-business segment in the near future. e-business assets have been classified as held for sale at recoverable value and an impairment loss of Rs. 30.7 million has been recorded against these assets in the current period.
The Pakistan Credit Rating Agency has maintained the Company’s long term rating of AA+ (Double A Plus) and short term rating of A1 Plus (A One Plus). These ratings denote the lowest expectation of credit risk emanating from a strong capacity for timely payment of financial commitments.
Looking forward, improved economic conditions, favourable interest rates and renewed business confidence are expected to increase the demand for credit to the gain of the Company.
On behalf of the Board
Shaheen AminChief Executive Dated: February 22, 2016
4
Independent Auditors’ Report To The Members On Review Of Condensed Interim Financial Information
Introduction
We have reviewed the accompanying condensed interim balance sheet of ORIX Leasing Pakistan Limited as at December 31, 2015 and the related condensed interim profit and loss account, condensed interim statement of comprehensive income, condensed interim cash flow statement and condensed interim statement of changes in equity together with the notes forming part thereof (here-in-after referred to as ‘the condensed interim financial information’) for the half year then ended. Management is responsible for the preparation and presentation of this condensed interim financial information in accordance with the approved accounting standards as applicable in Pakistan for interim financial reporting. Our responsibility is to express a conclusion on this condensed interim financial information based on our review. The figures of the condensed interim profit and loss account and condensed interim statement of comprehensive income for the quarters ended December 31, 2015 and December 31, 2014 have not been reviewed, as we are required to review only the cumulative figures for the half year ended December 31, 2015.
Scope of Review
We conducted our review in accordance with the International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information as of and for the half year ended December 31, 2015 is not prepared, in all material respects, in accordance with approved accounting standards as applicable in Pakistan for interim financial reporting.
Chartered Accountants
Engagement Partner: Rashid A. Jafer
Dated: February 24, 2016
Karachi.
5
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Condensed Interim Balance SheetAs at December 31, 2015
December 31, June 30,
Note
2015 2015(Un-audited) (Audited)
ASSETS
Non-current assetsProperty, plant and equipment 5 1,652,441,300 1,761,811,476Intangible assets 6 4,907,123 8,631,456
Net investment in finance lease 7 22,597,323,227 20,823,948,377Current maturity (9,500,304,557) (8,746,722,525)Allowance for potential lease losses (690,387,963) (721,375,996)
(10,190,692,520) (9,468,098,521)12,406,630,707 11,355,849,856
Investment in associated undertakings 2,284,473,758 2,176,352,899Long term investments 8 14,525,695 14,404,648Long term finances and loans 1,073,638,688 879,256,372Long term deposits 10,148,740 10,048,864
17,446,766,011 16,206,355,571Current assets
Short term finances 295,963,704 407,365,321Accrued return on investments and term finance 76,590,007 74,783,699Current maturity of non-current assets 9 10,894,201,825 9,966,101,697Short term investments 10 1,159,141,549 1,105,942,382Advances and prepayments 50,923,515 46,986,270Other receivables 81,208,188 74,513,043Cash and bank balances 167,619,915 173,286,352Taxation - net 159,496,918 171,010,858
12,885,145,621 12,019,989,622
Assets classified as held for sale 11 125,506,286 91,302,209
Total assets 30,457,417,918 28,317,647,402
EQUITY AND LIABILITIES
Share capital and reservesAuthorised share capital
350,000,000 (June 30, 2015: 350,000,000) Ordinary shares of Rs.10 each 3,500,000,000 3,500,000,000
Issued, subscribed and paid-up-capital 820,529,300 820,529,300Reserves 2,626,949,893 2,616,491,028
3,447,479,193 3,437,020,328
Surplus on revaluation of leasehold land and office building 111,025,116 112,009,008
Non-current liabilitiesLong term finances 12 4,134,737,318 4,707,563,110Long term loans 13 - -Long term certificates of deposit 5,183,662,509 5,116,943,351Long term deposits 5,854,593,630 5,238,768,218Deferred taxation 497,120,399 453,715,266Other long term liabilities 293,303,339 268,234,514Post-employment benefits - 849,197
15,963,417,195 15,786,073,656Current liabilitiesTrade and other payables 584,209,532 641,102,036Accrued interest / mark-up on loans, term finances and certificates of deposit 295,250,641 318,976,673Short term borrowings 14 2,467,052,997 884,301,394Short term certificates of deposit 1,139,064,341 944,348,226Current maturity of non-current liabilities 15 6,449,918,903 6,193,816,081
10,935,496,414 8,982,544,410Total equity and liabilities 30,457,417,918 28,317,647,402
CONTINGENCIES AND COMMITMENTS 16
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
ChairmanShaheen Amin Kunwar IdrisChief Executive
RupeesRupees
Condensed Interim Profit and Loss Account (Un-audited)For the half year and quarter ended December 31, 2015
December 31, December 31, December 31, December 31,
Note
2015 2014 2015 2014
CONTINUING OPERATIONS
INCOME
Income from operations
Finance lease 1,153,889,716 1,083,455,953 577,184,523 556,087,453Operating lease 17 284,729,414 365,159,487 133,771,193 176,580,499Mark-up on term finance 240,173,482 224,099,775 120,156,632 111,843,321
1,678,792,612 1,672,715,215 831,112,348 844,511,273
Income from other activitiesOther income - net 104,604,332 180,434,937 51,319,870 111,945,620
Share of profit of equity accounted undertakings 18 127,520,554 137,398,644 64,346,567 74,024,469
232,124,886 317,833,581 115,666,437 185,970,089
1,910,917,498 1,990,548,796 946,778,785 1,030,481,362
EXPENSES
Finance cost 19 827,169,464 856,686,319 411,848,648 425,439,270
Administrative and general expenses 408,447,494 386,158,601 206,495,393 200,302,956
Direct cost of lease 207,598,779 253,740,567 97,159,057 123,102,296
1,443,215,737 1,496,585,487 715,503,098 748,844,522
Profit before provision and taxation 467,701,761 493,963,309 231,275,687 281,636,840
Allowance for potential lease and other loan losses - net 49,738,204 75,140,471 20,605,190 39,174,462
Other (reversal) / provisions - net 20 (15,227,194) 33,012,244 (3,947,368) 29,537,244
34,511,010 108,152,715 16,657,822 68,711,706
Profit before tax 433,190,751 385,810,594 214,617,865 212,925,134
Taxation - Current 56,879,847 50,723,698 30,411,970 31,454,256
- Deferred 37,300,000 36,000,000 16,300,000 19,000,000
21 94,179,847 86,723,698 46,711,970 50,454,256
Profit from continuing operations for the period 339,010,904 299,086,896 167,905,895 162,470,878
(Loss) / profit after taxation from discontinued operations 22 (14,060,431) 22,812,251 (21,540,799) 9,480,703
Net profit for the period 324,950,473 321,899,147 146,365,096 171,951,581
BASIC AND DILUTED EARNING / (LOSS) PER SHARE
From continuing operations 4.13 3.64 2.04 1.98
From discontinued operations (0.17) 0.28 (0.26) 0.12
Total 3.96 3.92 1.78 2.10
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
Half year ended Quarter ended
ChairmanShaheen Amin Kunwar IdrisChief Executive
6 7
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Condensed Interim Balance SheetAs at December 31, 2015
December 31, June 30,
Note
2015 2015(Un-audited) (Audited)
ASSETS
Non-current assetsProperty, plant and equipment 5 1,652,441,300 1,761,811,476Intangible assets 6 4,907,123 8,631,456
Net investment in finance lease 7 22,597,323,227 20,823,948,377Current maturity (9,500,304,557) (8,746,722,525)Allowance for potential lease losses (690,387,963) (721,375,996)
(10,190,692,520) (9,468,098,521)12,406,630,707 11,355,849,856
Investment in associated undertakings 2,284,473,758 2,176,352,899Long term investments 8 14,525,695 14,404,648Long term finances and loans 1,073,638,688 879,256,372Long term deposits 10,148,740 10,048,864
17,446,766,011 16,206,355,571Current assets
Short term finances 295,963,704 407,365,321Accrued return on investments and term finance 76,590,007 74,783,699Current maturity of non-current assets 9 10,894,201,825 9,966,101,697Short term investments 10 1,159,141,549 1,105,942,382Advances and prepayments 50,923,515 46,986,270Other receivables 81,208,188 74,513,043Cash and bank balances 167,619,915 173,286,352Taxation - net 159,496,918 171,010,858
12,885,145,621 12,019,989,622
Assets classified as held for sale 11 125,506,286 91,302,209
Total assets 30,457,417,918 28,317,647,402
EQUITY AND LIABILITIES
Share capital and reservesAuthorised share capital
350,000,000 (June 30, 2015: 350,000,000) Ordinary shares of Rs.10 each 3,500,000,000 3,500,000,000
Issued, subscribed and paid-up-capital 820,529,300 820,529,300Reserves 2,626,949,893 2,616,491,028
3,447,479,193 3,437,020,328
Surplus on revaluation of leasehold land and office building 111,025,116 112,009,008
Non-current liabilitiesLong term finances 12 4,134,737,318 4,707,563,110Long term loans 13 - -Long term certificates of deposit 5,183,662,509 5,116,943,351Long term deposits 5,854,593,630 5,238,768,218Deferred taxation 497,120,399 453,715,266Other long term liabilities 293,303,339 268,234,514Post-employment benefits - 849,197
15,963,417,195 15,786,073,656Current liabilitiesTrade and other payables 584,209,532 641,102,036Accrued interest / mark-up on loans, term finances and certificates of deposit 295,250,641 318,976,673Short term borrowings 14 2,467,052,997 884,301,394Short term certificates of deposit 1,139,064,341 944,348,226Current maturity of non-current liabilities 15 6,449,918,903 6,193,816,081
10,935,496,414 8,982,544,410Total equity and liabilities 30,457,417,918 28,317,647,402
CONTINGENCIES AND COMMITMENTS 16
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
ChairmanShaheen Amin Kunwar IdrisChief Executive
RupeesRupees
Condensed Interim Profit and Loss Account (Un-audited)For the half year and quarter ended December 31, 2015
December 31, December 31, December 31, December 31,
Note
2015 2014 2015 2014
CONTINUING OPERATIONS
INCOME
Income from operations
Finance lease 1,153,889,716 1,083,455,953 577,184,523 556,087,453Operating lease 17 284,729,414 365,159,487 133,771,193 176,580,499Mark-up on term finance 240,173,482 224,099,775 120,156,632 111,843,321
1,678,792,612 1,672,715,215 831,112,348 844,511,273
Income from other activitiesOther income - net 104,604,332 180,434,937 51,319,870 111,945,620
Share of profit of equity accounted undertakings 18 127,520,554 137,398,644 64,346,567 74,024,469
232,124,886 317,833,581 115,666,437 185,970,089
1,910,917,498 1,990,548,796 946,778,785 1,030,481,362
EXPENSES
Finance cost 19 827,169,464 856,686,319 411,848,648 425,439,270
Administrative and general expenses 408,447,494 386,158,601 206,495,393 200,302,956
Direct cost of lease 207,598,779 253,740,567 97,159,057 123,102,296
1,443,215,737 1,496,585,487 715,503,098 748,844,522
Profit before provision and taxation 467,701,761 493,963,309 231,275,687 281,636,840
Allowance for potential lease and other loan losses - net 49,738,204 75,140,471 20,605,190 39,174,462
Other (reversal) / provisions - net 20 (15,227,194) 33,012,244 (3,947,368) 29,537,244
34,511,010 108,152,715 16,657,822 68,711,706
Profit before tax 433,190,751 385,810,594 214,617,865 212,925,134
Taxation - Current 56,879,847 50,723,698 30,411,970 31,454,256
- Deferred 37,300,000 36,000,000 16,300,000 19,000,000
21 94,179,847 86,723,698 46,711,970 50,454,256
Profit from continuing operations for the period 339,010,904 299,086,896 167,905,895 162,470,878
(Loss) / profit after taxation from discontinued operations 22 (14,060,431) 22,812,251 (21,540,799) 9,480,703
Net profit for the period 324,950,473 321,899,147 146,365,096 171,951,581
BASIC AND DILUTED EARNING / (LOSS) PER SHARE
From continuing operations 4.13 3.64 2.04 1.98
From discontinued operations (0.17) 0.28 (0.26) 0.12
Total 3.96 3.92 1.78 2.10
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
Half year ended Quarter ended
ChairmanShaheen Amin Kunwar IdrisChief Executive
6 7
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Rupees
Condensed Interim Statement of Comprehensive Income (Un-audited)
December 31,2015
December 31,2014
December 31,2015
December 31,2014
Profit for the period 324,950,473 321,899,147 146,365,096 171,951,581
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Exchange difference arising on translation of foreign associates - net of deferred tax 45,991,373 26,495,583 13,459,056 (15,806,515)
Unrealised (loss) / gain due to change in fair value of available
for sale securities - net (11,014,716) 16,755,037 (12,749,290) 13,502,850
Unrealised gain due to sale of available for sale securities transferred to profit and loss account - (10,265,402) - (692,982)
Net unrealised loss on revaluation of investments classified as
available for sale transferred to profit and loss account as
impairment loss - 2,755,600 - 2,755,600
34,976,657 35,740,818 709,766 (241,047)
Items that will not be reclassified to profit and loss
Net gain / (loss) on cash flow hedging instruments 18,256,228 11,634,099 (1,880,094) (27,053,125)
Total comprehensive income for the period 378,183,358 369,274,064 145,194,768 144,657,409
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
Half year ended Quarter ended
ChairmanShaheen Amin Kunwar IdrisChief Executive
For the half year and quarter ended December 31, 2015
December 31, December 31,
Note
2015 2014
Condensed Interim Cash Flow Statement (Un-audited)For the half year ended December 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the period (including discontinued operations) 416,250,473 413,295,234
Depreciation and amortisation 144,252,094 154,589,020Amortisation of transaction cost 7,296,344 9,188,088Allowance for potential lease and other loan losses - net 49,738,204 75,140,471(Reversal) / provision for other receivable (22,489,408) 29,202,010Provision for workers welfare fund 9,000,000 8,000,000Impairment on available for sale securities - 2,755,600Impairment loss on e-business assets 30,670,015 -Reversal of provision on investment (1,737,786) (1,050,000)Share of profit of equity accounted undertakings (127,520,554) (137,398,644)(Gain) / loss on hedging instruments (4,428,556) 4,715,257Exchange loss / (gain) on long term borrowings 4,428,556 (4,715,257)Exchange loss on dividend 341,945 -Unrealised gain on remeasurement of financial assets at fair value through profit or loss 4,565,822 492,379
406,641,668 440,121,773Profit on certificates of deposit 413,231,452 407,376,458
(7,094,574) (355,645)Return on investments and deposit (53,522,812) (56,354,741)Gain on disposal of fixed assets (6,185,070) (11,693,286)
847,187,340 920,013,483
Operating profit before working capital changes 1,263,437,813 1,333,308,717
(Increase) / decrease in operating assetsInvestment in finance lease - net (1,827,420,195) (1,851,640,730)Long term finances and loans - net (399,520,524) 69,007,336
115,340,844 (45,702,056)Advances and prepayments (10,888,335) (37,358,267)
4,787,279 (45,351,744)(99,876) 100,839
(2,117,800,807) (1,910,944,622)Increase / (decrease) in operating liabilitiesDeposits from lessees - net 765,770,953 756,948,876Interest / mark-up paid (379,525,942) (453,419,627)Profit paid on certificates of deposit (439,004,385) (527,048,626)Trade and other payables (53,809,404) 15,298,436
(106,568,778) (208,220,941)Net cash used in operating activities before income tax (960,931,772) (785,856,846)
(42,486,060) (76,822,204)Cash used in operating activities (1,003,417,832) (862,679,050)
CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditure incurred - own use and intangible assets (43,754,126) (20,272,165)Proceeds from disposal of assets - own use 12,845,805 5,169,586Capital expenditure incurred - operating lease assets (9,955,625) (21,771,679)Capital expenditure incurred - assets classified as held for sale (16,599,890) (1,499,395)Capital expenditure incurred - ijarah finance (41,604,000) (53,759,000)Proceeds from sale of operating lease assets 15,388,551 14,950,000Proceeds from sale of assets classified as held for sale 8,000 -Proceeds from sale of ijarah finance assets 926,875 1,850,761
(56,407,546) 105,036,447Purchase of right shares of equity accounted undertaking - (67,375,000)
78,778,629 8,959,25942,767,390 31,901,700
Net cash (used in) / generated from investing activities (17,605,937) 3,190,514
CASH FLOWS FROM FINANCING ACTIVITIESProceeds from long term loans 1,000,000,000 2,201,010,000Short term borrowings-net 1,130,000,000 525,000,000Certificates of deposit issued - net 420,821,359 67,955,954Repayment of long term loans and finances (1,621,422,303) (2,177,978,405)
(366,793,327) (257,439,540)Net cash generated from financing activities 562,605,729 358,548,009
Net increase / (decrease) in cash and cash equivalents (458,418,040) (500,940,527)
Adjustments for:
Finance cost
Dividend income
Short term finances
Other receivablesLong term deposits
Income tax paid
Investments - net
Dividend receivedInterest received
Dividend paid
Cash and cash equivalents at beginning of the period (711,015,042) (594,151,272)
Cash and cash equivalents at end of the period 25 (1,169,433,082) (1,095,091,799)
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
ChairmanShaheen Amin Kunwar IdrisChief Executive
Rupees
8 9
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Rupees
Condensed Interim Statement of Comprehensive Income (Un-audited)
December 31,2015
December 31,2014
December 31,2015
December 31,2014
Profit for the period 324,950,473 321,899,147 146,365,096 171,951,581
Other comprehensive income
Items that may be reclassified subsequently to profit and loss
Exchange difference arising on translation of foreign associates - net of deferred tax 45,991,373 26,495,583 13,459,056 (15,806,515)
Unrealised (loss) / gain due to change in fair value of available
for sale securities - net (11,014,716) 16,755,037 (12,749,290) 13,502,850
Unrealised gain due to sale of available for sale securities transferred to profit and loss account - (10,265,402) - (692,982)
Net unrealised loss on revaluation of investments classified as
available for sale transferred to profit and loss account as
impairment loss - 2,755,600 - 2,755,600
34,976,657 35,740,818 709,766 (241,047)
Items that will not be reclassified to profit and loss
Net gain / (loss) on cash flow hedging instruments 18,256,228 11,634,099 (1,880,094) (27,053,125)
Total comprehensive income for the period 378,183,358 369,274,064 145,194,768 144,657,409
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
Half year ended Quarter ended
ChairmanShaheen Amin Kunwar IdrisChief Executive
For the half year and quarter ended December 31, 2015
December 31, December 31,
Note
2015 2014
Condensed Interim Cash Flow Statement (Un-audited)For the half year ended December 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax for the period (including discontinued operations) 416,250,473 413,295,234
Depreciation and amortisation 144,252,094 154,589,020Amortisation of transaction cost 7,296,344 9,188,088Allowance for potential lease and other loan losses - net 49,738,204 75,140,471(Reversal) / provision for other receivable (22,489,408) 29,202,010Provision for workers welfare fund 9,000,000 8,000,000Impairment on available for sale securities - 2,755,600Impairment loss on e-business assets 30,670,015 -Reversal of provision on investment (1,737,786) (1,050,000)Share of profit of equity accounted undertakings (127,520,554) (137,398,644)(Gain) / loss on hedging instruments (4,428,556) 4,715,257Exchange loss / (gain) on long term borrowings 4,428,556 (4,715,257)Exchange loss on dividend 341,945 -Unrealised gain on remeasurement of financial assets at fair value through profit or loss 4,565,822 492,379
406,641,668 440,121,773Profit on certificates of deposit 413,231,452 407,376,458
(7,094,574) (355,645)Return on investments and deposit (53,522,812) (56,354,741)Gain on disposal of fixed assets (6,185,070) (11,693,286)
847,187,340 920,013,483
Operating profit before working capital changes 1,263,437,813 1,333,308,717
(Increase) / decrease in operating assetsInvestment in finance lease - net (1,827,420,195) (1,851,640,730)Long term finances and loans - net (399,520,524) 69,007,336
115,340,844 (45,702,056)Advances and prepayments (10,888,335) (37,358,267)
4,787,279 (45,351,744)(99,876) 100,839
(2,117,800,807) (1,910,944,622)Increase / (decrease) in operating liabilitiesDeposits from lessees - net 765,770,953 756,948,876Interest / mark-up paid (379,525,942) (453,419,627)Profit paid on certificates of deposit (439,004,385) (527,048,626)Trade and other payables (53,809,404) 15,298,436
(106,568,778) (208,220,941)Net cash used in operating activities before income tax (960,931,772) (785,856,846)
(42,486,060) (76,822,204)Cash used in operating activities (1,003,417,832) (862,679,050)
CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditure incurred - own use and intangible assets (43,754,126) (20,272,165)Proceeds from disposal of assets - own use 12,845,805 5,169,586Capital expenditure incurred - operating lease assets (9,955,625) (21,771,679)Capital expenditure incurred - assets classified as held for sale (16,599,890) (1,499,395)Capital expenditure incurred - ijarah finance (41,604,000) (53,759,000)Proceeds from sale of operating lease assets 15,388,551 14,950,000Proceeds from sale of assets classified as held for sale 8,000 -Proceeds from sale of ijarah finance assets 926,875 1,850,761
(56,407,546) 105,036,447Purchase of right shares of equity accounted undertaking - (67,375,000)
78,778,629 8,959,25942,767,390 31,901,700
Net cash (used in) / generated from investing activities (17,605,937) 3,190,514
CASH FLOWS FROM FINANCING ACTIVITIESProceeds from long term loans 1,000,000,000 2,201,010,000Short term borrowings-net 1,130,000,000 525,000,000Certificates of deposit issued - net 420,821,359 67,955,954Repayment of long term loans and finances (1,621,422,303) (2,177,978,405)
(366,793,327) (257,439,540)Net cash generated from financing activities 562,605,729 358,548,009
Net increase / (decrease) in cash and cash equivalents (458,418,040) (500,940,527)
Adjustments for:
Finance cost
Dividend income
Short term finances
Other receivablesLong term deposits
Income tax paid
Investments - net
Dividend receivedInterest received
Dividend paid
Cash and cash equivalents at beginning of the period (711,015,042) (594,151,272)
Cash and cash equivalents at end of the period 25 (1,169,433,082) (1,095,091,799)
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
ChairmanShaheen Amin Kunwar IdrisChief Executive
Rupees
8 9
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Issued,
subscribed
and paid-up Share
premiumStatutory
reserve
Unappropriated
profit
Hedging
reserve
Total
shareholders
equitycapital
Unrealised
gains /
(losses) on
investment
Foreign
currency
translation
reserve
Reserves
(Rupees)
Condensed Interim Statement of Changes In Equity (Un-audited)
Balance as at July 01, 2014 820,529,300 448,603,499 866,000,000 608,531,814 9,738,741 (58,090,553) 287,507,333 2,982,820,134
Total comprehensive income for the six months
period ended December 31, 2014
Profit for the period - - - 321,899,147 - - - 321,899,147
Other comprehensive income
Exchange difference arising on translation of
foreign associates - net of deferred tax - - - - - - 26,495,583 26,495,583
Unrealised gain due to change in fair value of
available for sale securities - net - - - - 16,755,037 - - 16,755,037
Unrealized gain due to sale of available for sale securities - - - - (10,265,402) - - (10,265,402)
transferred to profit and loss account
Net unrealized loss on revaluation of investmentsclassified as available for sale transferred to profit
& loss as impairment loss - - - - 2,755,600 - - 2,755,600
Net gain on cash flow hedging instruments - - - - - 11,634,099 - 11,634,099
- - - - 9,245,235 11,634,099 26,495,583 47,374,917
Transferred from surplus on revaluation of fixed
assets on account of incremental depreciation - - - 1,513,692 - - - 1,513,692
Transactions with owner recorded directly in
equity-distribution
Cash dividend @ Rs.3.50 per ordinary share of
Rs. 10.00 each for the year ended June 30, 2014 - - - (287,185,255) - - - (287,185,255)
Balance as at December 31, 2014 820,529,300 448,603,499 866,000,000 644,759,398 18,983,976 (46,456,454) 314,002,916 3,066,422,635
Balance as at July 01, 2015 820,529,300 448,603,499 899,545,177 961,597,991 27,566,224 (35,031,846) 314,209,983 3,437,020,328
Total comprehensive income for the six months
period ended December 31, 2015
Profit for the period - - - 324,950,473 - - - 324,950,473
Other comprehensive incomeExchange difference arising on translation of
foreign associates - net of deferred tax - - - - - - 45,991,373 45,991,373
Unrealised loss due to change in fair value of
available for sale securities - net - - - - (11,014,716) - - (11,014,716)
Unrealised gain due to sale of available for sale
securities transferred to profit and loss account - - - - - - - -
Net unrealised loss on revaluation of investmentsclassified as available for sale transferred to
profit and loss account as impairment loss - - - - - - - -
Net gain on cash flow hedging instruments - - - - - 18,256,228 - 18,256,228
- - - - (11,014,716) 18,256,228 45,991,373 53,232,885
Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - - - 1,513,692 - - - 1,513,692
Transactions with owner recorded directly inequity-distribution
Cash dividend @ Rs.4.50 per ordinary share of Rs. 10.00 each for the year ended June 30, 2015 - - - (369,238,185) - - - (369,238,185)
Balance as at December 31, 2015 820,529,300 448,603,499 899,545,177 918,823,971 16,551,508 (16,775,618) 360,201,356 3,447,479,193
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
ChairmanShaheen Amin Kunwar IdrisChief Executive
For the half year ended December 31, 2015
Capital Reserves 1 LEGAL STATUS AND OPERATIONS
ORIX Leasing Pakistan Limited ("the Company") was incorporated in Pakistan as a private limited company on July 1, 1986 under the Companies Ordinance, 1984 and was converted into a public limited company on December 23, 1987. The Company is listed on the Pakistan Stock Exchange. The registered office of the Company is situated at Islamic Chamber of Commerce Building, Clifton, Karachi. The Company is licensed to carry out leasing business as a Non-Banking Finance Company (NBFC) under the Non-Banking Finance Companies (Establishment and Regulations) Rules 2003 issued by the Securities and Exchange Commission of Pakistan (SECP).
1.1 Pakistan Credit Rating Agency Limited (PACRA) has assigned long term credit rating of AA+ and short term credit rating of A1+ to the Company on January 14, 2016.
2 BASIS OF PREPARATION
2.1 This condensed interim financial information has been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountant of Pakistan (ICAP) as are notified under the Companies Ordinance, 1984, the provisions of the Companies Ordinance, 1984, the Non-Banking Finance Companies (Established and Regulations) Rules, 2003 (the "NBFC Rules"), the Non-Banking Finance and Notified Entities Regulations, 2008 (the "NBFC Regulations") and the directives issued by the SECP. In case the requirements differ, the provisions of and directives issued under the Companies Ordinance, 1984, the NBFC regulations, the NBFC Rules and the directives issued by SECP prevail.
2.2 The disclosures made in this condensed interim financial information have, however, been limited based on the requirements of the International Accounting Standard 34: 'Interim Financial Reporting'. This condensed interim financial information does not include all of the information required for a full set of financial statements and should be read in conjunction with the annual published audited financial statements of the Company for the year ended June 30, 2015.
2.3 This condensed interim financial information is unaudited. However, a review has been performed by the external auditors in accordance with the requirements of the Code of Corporate Governance.
2.4 The comparative balance sheet presented in this condensed interim financial information has been extracted from the audited financial statements of the Company for the year ended June 30, 2015, whereas the comparative profit and loss account, statement of comprehensive income, statement of changes in equity and cash flow statement are stated from the unaudited condensed interim financial information for the period ended December 31, 2014.
2.5 This condensed interim financial information has been presented in Pakistani Rupees, which is the functional currency of the Company.
3 SIGNIFICANT POLICIES, ESTIMATES, ASSUMPTIONS AND CHANGES THEREIN
3.1 The accounting policies adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of the audited annual published financial statements of the Company for the year ended June 30, 2015.
3.2 The preparation of this condensed interim financial information in conformity with the approved accounting standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. Revisions to accounting estimates are recognised prospectively commencing from the period of revision.
3.3 The significant judgments made by management in applying the Company’s accounting polices and the key sources of estimation uncertainty were the same as those that were applied to the audited annual published financial statements for the year ended June 30, 2015.
3.4 Standards, interpretations and amendments to published approved accounting standards that are effective in the current period
3.4.1 IFRS 13 'Fair Value Measurement' establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other IFRS. It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7 'Financial Instruments: Disclosures'. As a result the company has included additional disclosures in this regard in note 24 to the condensed interim financial information. Notwithstanding the above, the change had no significant impacts on the measurements of the Company's assets and liabilities.
3.4.2 Certain amendments to approved accounting standards have been published and are mandatory for the Company's accounting period beginning on or after July 1, 2015. None of these amendments have a significant effect on this condensed interim financial information.
4 RISK MANAGEMENT POLICIES
The financial risk management objectives and policies are consistent with those disclosed in the annual audited published financial statements of the Company for the year ended June 30, 2015.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
10 11
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Issued,
subscribed
and paid-up Share
premiumStatutory
reserve
Unappropriated
profit
Hedging
reserve
Total
shareholders
equitycapital
Unrealised
gains /
(losses) on
investment
Foreign
currency
translation
reserve
Reserves
(Rupees)
Condensed Interim Statement of Changes In Equity (Un-audited)
Balance as at July 01, 2014 820,529,300 448,603,499 866,000,000 608,531,814 9,738,741 (58,090,553) 287,507,333 2,982,820,134
Total comprehensive income for the six months
period ended December 31, 2014
Profit for the period - - - 321,899,147 - - - 321,899,147
Other comprehensive income
Exchange difference arising on translation of
foreign associates - net of deferred tax - - - - - - 26,495,583 26,495,583
Unrealised gain due to change in fair value of
available for sale securities - net - - - - 16,755,037 - - 16,755,037
Unrealized gain due to sale of available for sale securities - - - - (10,265,402) - - (10,265,402)
transferred to profit and loss account
Net unrealized loss on revaluation of investmentsclassified as available for sale transferred to profit
& loss as impairment loss - - - - 2,755,600 - - 2,755,600
Net gain on cash flow hedging instruments - - - - - 11,634,099 - 11,634,099
- - - - 9,245,235 11,634,099 26,495,583 47,374,917
Transferred from surplus on revaluation of fixed
assets on account of incremental depreciation - - - 1,513,692 - - - 1,513,692
Transactions with owner recorded directly in
equity-distribution
Cash dividend @ Rs.3.50 per ordinary share of
Rs. 10.00 each for the year ended June 30, 2014 - - - (287,185,255) - - - (287,185,255)
Balance as at December 31, 2014 820,529,300 448,603,499 866,000,000 644,759,398 18,983,976 (46,456,454) 314,002,916 3,066,422,635
Balance as at July 01, 2015 820,529,300 448,603,499 899,545,177 961,597,991 27,566,224 (35,031,846) 314,209,983 3,437,020,328
Total comprehensive income for the six months
period ended December 31, 2015
Profit for the period - - - 324,950,473 - - - 324,950,473
Other comprehensive incomeExchange difference arising on translation of
foreign associates - net of deferred tax - - - - - - 45,991,373 45,991,373
Unrealised loss due to change in fair value of
available for sale securities - net - - - - (11,014,716) - - (11,014,716)
Unrealised gain due to sale of available for sale
securities transferred to profit and loss account - - - - - - - -
Net unrealised loss on revaluation of investmentsclassified as available for sale transferred to
profit and loss account as impairment loss - - - - - - - -
Net gain on cash flow hedging instruments - - - - - 18,256,228 - 18,256,228
- - - - (11,014,716) 18,256,228 45,991,373 53,232,885
Transferred from surplus on revaluation of fixed assets on account of incremental depreciation - - - 1,513,692 - - - 1,513,692
Transactions with owner recorded directly inequity-distribution
Cash dividend @ Rs.4.50 per ordinary share of Rs. 10.00 each for the year ended June 30, 2015 - - - (369,238,185) - - - (369,238,185)
Balance as at December 31, 2015 820,529,300 448,603,499 899,545,177 918,823,971 16,551,508 (16,775,618) 360,201,356 3,447,479,193
The annexed notes 1 to 28 form an integral part of this condensed interim financial information.
ChairmanShaheen Amin Kunwar IdrisChief Executive
For the half year ended December 31, 2015
Capital Reserves 1 LEGAL STATUS AND OPERATIONS
ORIX Leasing Pakistan Limited ("the Company") was incorporated in Pakistan as a private limited company on July 1, 1986 under the Companies Ordinance, 1984 and was converted into a public limited company on December 23, 1987. The Company is listed on the Pakistan Stock Exchange. The registered office of the Company is situated at Islamic Chamber of Commerce Building, Clifton, Karachi. The Company is licensed to carry out leasing business as a Non-Banking Finance Company (NBFC) under the Non-Banking Finance Companies (Establishment and Regulations) Rules 2003 issued by the Securities and Exchange Commission of Pakistan (SECP).
1.1 Pakistan Credit Rating Agency Limited (PACRA) has assigned long term credit rating of AA+ and short term credit rating of A1+ to the Company on January 14, 2016.
2 BASIS OF PREPARATION
2.1 This condensed interim financial information has been prepared in accordance with the approved accounting standards as applicable in Pakistan. Approved accounting standards comprise of such International Financial Reporting Standards ("IFRSs") issued by the International Accounting Standards Board and Islamic Financial Accounting Standards (IFAS) issued by the Institute of Chartered Accountant of Pakistan (ICAP) as are notified under the Companies Ordinance, 1984, the provisions of the Companies Ordinance, 1984, the Non-Banking Finance Companies (Established and Regulations) Rules, 2003 (the "NBFC Rules"), the Non-Banking Finance and Notified Entities Regulations, 2008 (the "NBFC Regulations") and the directives issued by the SECP. In case the requirements differ, the provisions of and directives issued under the Companies Ordinance, 1984, the NBFC regulations, the NBFC Rules and the directives issued by SECP prevail.
2.2 The disclosures made in this condensed interim financial information have, however, been limited based on the requirements of the International Accounting Standard 34: 'Interim Financial Reporting'. This condensed interim financial information does not include all of the information required for a full set of financial statements and should be read in conjunction with the annual published audited financial statements of the Company for the year ended June 30, 2015.
2.3 This condensed interim financial information is unaudited. However, a review has been performed by the external auditors in accordance with the requirements of the Code of Corporate Governance.
2.4 The comparative balance sheet presented in this condensed interim financial information has been extracted from the audited financial statements of the Company for the year ended June 30, 2015, whereas the comparative profit and loss account, statement of comprehensive income, statement of changes in equity and cash flow statement are stated from the unaudited condensed interim financial information for the period ended December 31, 2014.
2.5 This condensed interim financial information has been presented in Pakistani Rupees, which is the functional currency of the Company.
3 SIGNIFICANT POLICIES, ESTIMATES, ASSUMPTIONS AND CHANGES THEREIN
3.1 The accounting policies adopted in the preparation of this condensed interim financial information are the same as those applied in the preparation of the audited annual published financial statements of the Company for the year ended June 30, 2015.
3.2 The preparation of this condensed interim financial information in conformity with the approved accounting standards requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and income and expenses. Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including reasonable expectations of future events. Revisions to accounting estimates are recognised prospectively commencing from the period of revision.
3.3 The significant judgments made by management in applying the Company’s accounting polices and the key sources of estimation uncertainty were the same as those that were applied to the audited annual published financial statements for the year ended June 30, 2015.
3.4 Standards, interpretations and amendments to published approved accounting standards that are effective in the current period
3.4.1 IFRS 13 'Fair Value Measurement' establishes a single framework for measuring fair value and making disclosures about fair value measurements when such measurements are required or permitted by other IFRS. It unifies the definition of fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It replaces and expands the disclosure requirements about fair value measurements in other IFRSs, including IFRS 7 'Financial Instruments: Disclosures'. As a result the company has included additional disclosures in this regard in note 24 to the condensed interim financial information. Notwithstanding the above, the change had no significant impacts on the measurements of the Company's assets and liabilities.
3.4.2 Certain amendments to approved accounting standards have been published and are mandatory for the Company's accounting period beginning on or after July 1, 2015. None of these amendments have a significant effect on this condensed interim financial information.
4 RISK MANAGEMENT POLICIES
The financial risk management objectives and policies are consistent with those disclosed in the annual audited published financial statements of the Company for the year ended June 30, 2015.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
10 11
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
5 PROPERTY, PLANT AND EQUIPMENT
December 31, June 302015 2015
Rupees(Un-audited) (Audited)
Fixed assets - own use 400,380,451 392,126,268
Fixed assets - on operating lease 1,081,182,060 1,184,613,802
Fixed assets - Ijarah finance 170,878,789 185,071,406
1,652,441,300 1,761,811,476
Generators / Machinery - - 8,417,192 30,314,770 30,540,000 -
Generators accessories - - 1,538,433 - - -
Leasehold improvements 4,859,505 36,933 - - - -
Furniture, fittings and office equipment 13,599,243 8,034,000 - - - -
Computers and accessories 4,932,910 1,769,000 - - - -
Communication equipment - - 16,599,890 160,000 - -
Vehicles 19,776,658 19,862,422 - 3,365,500 11,064,000 19,035,500
December 31, 2015 43,168,316 29,702,355 26,555,515 33,840,270 41,604,000 19,035,500
December 31, 2014 20,272,165 9,837,423 23,271,074 31,741,628 53,759,000 3,023,000
Additions Disposals
Own Use
Rupees
Additions Disposals
Asset under Ijarah financing
Additions Disposals
Operating lease assets
5.1 The following is a statement of cost of additions and disposals to / from property, plant and equipment for the six months period ended December 31, 2015.
December 31, June 302015 2015
Rupees(Un-audited) (Audited)6 INTANGIBLE ASSETS
Computer software and license 4,907,123 8,631,456
7 NET INVESTMENT IN FINANCE LEASE
8 LONG TERM INVESTMENTS
Held to maturity investments :Pakistan investment bonds (PIBs) 8.1 14,525,695 14,404,648
Term finance certificates (TFCs) - Unlisted 8.2 2,570,628 3,265,62717,096,323 17,670,275
Less: Allowance for potential losses 2,570,628 3,265,62714,525,695 14,404,648
Instalment contract receivables 18,048,772,381 17,062,648,835
Residual value 7,575,324,525 6,808,120,02225,624,096,906 23,870,768,857
Less: Unearned finance income 3,026,773,679 3,046,820,48022,597,323,227 20,823,948,377
6.1 During the period additions amounting to Rs 585,810 (December 2014:Rs nil) were made to intangibles by the company. No disposals were made during the period.
8.1 This investment has been made as required under Regulation 14(4)(g) of the Non Banking Finance Companies and Notified Entities Regulations, 2008 to maintain liquidity against certificates of deposit. This is redeemable within a period of 1.5 years (June 2015: 2 years) from the balance sheet date, carrying coupon rate of 9.60% (June 2015: 9.60%) per annum due half yearly from the date of issue.
8.2 This represents investment made by the Company in unlisted Term Finance Certificates (TFCs). The exposure against these TFCs has been fully provided.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Note
December 31, June 302015 2015
Rupees(Un-audited) (Audited)9 CURRENT MATURITY OF NON-CURRENT ASSETS
Current maturity of :
Net investment in finance lease 9,500,304,557 8,746,722,525
Long term finances and loans 1,393,897,268 1,219,379,172
10,894,201,825 9,966,101,697
10 SHORT TERM INVESTMENTS
Held to maturity investment :
Certificates of deposit - 708,602
At fair value through profit and loss :
Treasury bills 10.1 530,127,848 463,531,798
Term finance certificates 10.2 15,335,790 18,992,047
545,463,638 482,523,845
Available-for-sale :
Pakistan investment bonds (PIBs) 10.3 606,618,771 616,133,538
Ordinary shares 15,059,667 15,285,526
621,678,438 631,419,064
Loans and receivables :
Fund placements - 334,183
Less: Allowance for potential losses 8,000,527 9,043,312
1,159,141,549 1,105,942,382
10.1 These represent investments made as required under Regulation 14(4)(g) of the NBFC Regulations to maintain liquidity against certificates of deposit. These are redeemable within a period of 12 months (June 2015: 12 months) from the balance sheet date. These carry yields ranging from 6.05% to 7.1663% (June 2015: 6.73% to 8.33%).
10.2 These represent investments made by the Company in Term Finance Certificates (TFCs). These investments carry markup upto 6 months KIBOR + 2.4% (June 2015: upto 6 month KIBOR + 2.4%).
10.3 These represent investments made as required under Regulation 14(4)(g) of the NBFC Regulations to maintain liquidity against certificates of deposit. These are highly liquid and can be sold in the secondary market at any time. These carry coupon rate ranging from 11.25% to 11.50% (June 2015: 11.25% to 11.50%).
11 ASSETS CLASSIFIED AS HELD FOR SALE
12 LONG TERM FINANCES - secured
Long term finances utilised under mark-up
arrangements - financial institutions 7,661,260,687 8,033,455,235
Less: Unamortised transaction cost 24,206,687 31,503,031
Less: Current maturity 15 3,502,316,682 3,294,389,094
3,526,523,369 3,325,892,125
4,134,737,318 4,707,563,110
Non current assets pertaining to E-business 11.1 32,000,000 -
Investment in associated undertaking 11.2 87,754,399 87,754,399
Repossessed assets 5,751,887 3,547,810
125,506,286 91,302,209
11.1 Fixed and intangible assets having a book value of Rs 57,372,051 and Rs 399,840 respectively as at December 31, 2015 have been measured at fair value less cost to sell, i.e Rs 32 million, in accordance with the requirements of IFRS 5 " Non-current assets held for sale and discontinued operations"
11.2 The management intends to divest the Company's investment in OPP (Private) Limited, subject to necessary regulatory approvals.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Note
12 13
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
5 PROPERTY, PLANT AND EQUIPMENT
December 31, June 302015 2015
Rupees(Un-audited) (Audited)
Fixed assets - own use 400,380,451 392,126,268
Fixed assets - on operating lease 1,081,182,060 1,184,613,802
Fixed assets - Ijarah finance 170,878,789 185,071,406
1,652,441,300 1,761,811,476
Generators / Machinery - - 8,417,192 30,314,770 30,540,000 -
Generators accessories - - 1,538,433 - - -
Leasehold improvements 4,859,505 36,933 - - - -
Furniture, fittings and office equipment 13,599,243 8,034,000 - - - -
Computers and accessories 4,932,910 1,769,000 - - - -
Communication equipment - - 16,599,890 160,000 - -
Vehicles 19,776,658 19,862,422 - 3,365,500 11,064,000 19,035,500
December 31, 2015 43,168,316 29,702,355 26,555,515 33,840,270 41,604,000 19,035,500
December 31, 2014 20,272,165 9,837,423 23,271,074 31,741,628 53,759,000 3,023,000
Additions Disposals
Own Use
Rupees
Additions Disposals
Asset under Ijarah financing
Additions Disposals
Operating lease assets
5.1 The following is a statement of cost of additions and disposals to / from property, plant and equipment for the six months period ended December 31, 2015.
December 31, June 302015 2015
Rupees(Un-audited) (Audited)6 INTANGIBLE ASSETS
Computer software and license 4,907,123 8,631,456
7 NET INVESTMENT IN FINANCE LEASE
8 LONG TERM INVESTMENTS
Held to maturity investments :Pakistan investment bonds (PIBs) 8.1 14,525,695 14,404,648
Term finance certificates (TFCs) - Unlisted 8.2 2,570,628 3,265,62717,096,323 17,670,275
Less: Allowance for potential losses 2,570,628 3,265,62714,525,695 14,404,648
Instalment contract receivables 18,048,772,381 17,062,648,835
Residual value 7,575,324,525 6,808,120,02225,624,096,906 23,870,768,857
Less: Unearned finance income 3,026,773,679 3,046,820,48022,597,323,227 20,823,948,377
6.1 During the period additions amounting to Rs 585,810 (December 2014:Rs nil) were made to intangibles by the company. No disposals were made during the period.
8.1 This investment has been made as required under Regulation 14(4)(g) of the Non Banking Finance Companies and Notified Entities Regulations, 2008 to maintain liquidity against certificates of deposit. This is redeemable within a period of 1.5 years (June 2015: 2 years) from the balance sheet date, carrying coupon rate of 9.60% (June 2015: 9.60%) per annum due half yearly from the date of issue.
8.2 This represents investment made by the Company in unlisted Term Finance Certificates (TFCs). The exposure against these TFCs has been fully provided.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Note
December 31, June 302015 2015
Rupees(Un-audited) (Audited)9 CURRENT MATURITY OF NON-CURRENT ASSETS
Current maturity of :
Net investment in finance lease 9,500,304,557 8,746,722,525
Long term finances and loans 1,393,897,268 1,219,379,172
10,894,201,825 9,966,101,697
10 SHORT TERM INVESTMENTS
Held to maturity investment :
Certificates of deposit - 708,602
At fair value through profit and loss :
Treasury bills 10.1 530,127,848 463,531,798
Term finance certificates 10.2 15,335,790 18,992,047
545,463,638 482,523,845
Available-for-sale :
Pakistan investment bonds (PIBs) 10.3 606,618,771 616,133,538
Ordinary shares 15,059,667 15,285,526
621,678,438 631,419,064
Loans and receivables :
Fund placements - 334,183
Less: Allowance for potential losses 8,000,527 9,043,312
1,159,141,549 1,105,942,382
10.1 These represent investments made as required under Regulation 14(4)(g) of the NBFC Regulations to maintain liquidity against certificates of deposit. These are redeemable within a period of 12 months (June 2015: 12 months) from the balance sheet date. These carry yields ranging from 6.05% to 7.1663% (June 2015: 6.73% to 8.33%).
10.2 These represent investments made by the Company in Term Finance Certificates (TFCs). These investments carry markup upto 6 months KIBOR + 2.4% (June 2015: upto 6 month KIBOR + 2.4%).
10.3 These represent investments made as required under Regulation 14(4)(g) of the NBFC Regulations to maintain liquidity against certificates of deposit. These are highly liquid and can be sold in the secondary market at any time. These carry coupon rate ranging from 11.25% to 11.50% (June 2015: 11.25% to 11.50%).
11 ASSETS CLASSIFIED AS HELD FOR SALE
12 LONG TERM FINANCES - secured
Long term finances utilised under mark-up
arrangements - financial institutions 7,661,260,687 8,033,455,235
Less: Unamortised transaction cost 24,206,687 31,503,031
Less: Current maturity 15 3,502,316,682 3,294,389,094
3,526,523,369 3,325,892,125
4,134,737,318 4,707,563,110
Non current assets pertaining to E-business 11.1 32,000,000 -
Investment in associated undertaking 11.2 87,754,399 87,754,399
Repossessed assets 5,751,887 3,547,810
125,506,286 91,302,209
11.1 Fixed and intangible assets having a book value of Rs 57,372,051 and Rs 399,840 respectively as at December 31, 2015 have been measured at fair value less cost to sell, i.e Rs 32 million, in accordance with the requirements of IFRS 5 " Non-current assets held for sale and discontinued operations"
11.2 The management intends to divest the Company's investment in OPP (Private) Limited, subject to necessary regulatory approvals.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Note
12 13
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Name of lending Commencement Mode of loanRate institution of repayment repayment
December 31, June 302015 2015
Rupees(Un-audited) (Audited)
13 LONG TERM LOANS
Secured :Pakistan Poverty Alleviation Fund KIBOR+1.50% - 120,299,248
Unsecured :ECO Trade and Development Bank 149,714,373 290,571,518
Total long term loans 149,714,373 410,870,766Less: Current maturity (note 15) 149,714,373 410,870,766
- -
15 CURRENT MATURITY OF NON-CURRENT LIABILITIES
Current maturity of :Long term finances 12 3,502,316,682 3,294,389,094
Long term loans 13 149,714,373 410,870,766
Long term certificates of deposit 1,081,353,226 921,967,140Long term deposits 1,716,534,622 1,566,589,081
6,449,918,903 6,193,816,081
17 INCOME FROM OPERATING LEASE
11 quarterly instalments
June 28, 2013
US$ six month LIBOR+1.50%
7 equal semi annual
instalments
January 7, 2013
December 31, June 302015 2015
Rupees(Un-audited) (Audited)14 SHORT TERM BORROWINGS
From banking Companies :Running finance arrangements - secured 1,337,052,997 884,301,394Short term loans - secured 1,130,000,000 -
2,467,052,997 884,301,394
16 CONTINGENCIES AND COMMITMENTS
16.1 In November 2011, the Company received a show cause notice from the Large Taxpayers Unit of the Federal Board of Revenue (FBR) Karachi as to why Federal Excise Duty (FED) on mark-up and other income for the years ended June 30, 2008, 2009 and 2010 amounting to Rs. 1,126 million along with applicable penalty and default surcharge should not be recovered from the Company. The Company's legal advisor is of the opinion that charging of FED on mark-up based income is unlawful and accordingly the Company filed a suit before the Honorable High Court of Sindh challenging levy of FED on mark-up income. The Honorable High Court of Sindh in its order dated November, 19th, 2015 directed FBR to issue the notice of hearing and thereafter decide the matter. The Honorable High Court of Sindh further directed that recovery shall not be affected till the decision is made. Subsequent to the said order no notice from FBR for hearing has been received. Management, based on the merit of the case, consider that decision will be in the Company's favor hence no provision has been made in this regard.
16.2 There were no changes in the status of contingencies as disclosed in the note 31 to the financial statements for the year ended June 30, 2015 except as disclosed in note 16.1.
16.3 Finance lease and Ijarah contracts committed but not executed at the balance sheet date amounted to Rs 28.59 million (June 2015: Rs 28 million)
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
Generators and Vehicles 216,445,219 309,347,837
Islamic Finance 68,284,195 55,811,650284,729,414 365,159,487
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Note
18 SHARE OF PROFIT OF EQUITY ACCOUNTED UNDERTAKINGS
Quoted
Oman ORIX Leasing Company SAOG
Un-Quoted
Saudi ORIX Leasing Company
Al Hail ORIX Finance PSC
SK Leasing JSC 18.1ORIX Leasing Egypt SAE
730,364,665
730,364,665
1,281,716,167
(69,568,516)
-
86,555,265
1,298,702,916
2,029,067,581
85,026,862
85,026,862
24,673,036
(2,087,055)
-
19,907,711
42,493,692
127,520,554
659,829,757
659,829,757
1,583,860,822
429,493,272
-
74,822,275
2,088,176,369
2,748,006,126
76,815,401
76,815,401
30,489,321
12,884,799
-
17,209,123
60,583,243
137,398,644
Note
Half year ended December 31, 2015
Half year ended December 31, 2014
Name of associates
Rupees
Associates' Associates'
profit / (loss) profit / (loss)
after tax after tax
Share of Share ofassociates' associates'
profit / (loss) profit / (loss)after tax after tax
(Un-audited) (Un-audited)
18.1 The Company has suspended recognising share of profit on the said investment due to significant impediments in repatriation of capital / investment. However, the Company received a dividend of Rs 7,094,574, during the period.
19 FINANCE COST
Interest / mark-up on :
- Long term finances 340,389,972 325,748,761- Long term loans 9,400,521 41,926,412
- Short term borrowings 42,550,075 63,448,821
Profit on certificates of deposit 413,231,452 407,376,458Amortisation of transaction costs 7,296,344 9,188,088
Bank charges and commission 14,301,100 8,997,779827,169,464 856,686,319
20 OTHER PROVISIONS - NET
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
(Reversal) / provision for other receivable (22,489,408) 23,306,644
Provision for workers' welfare fund 9,000,000 8,000,000Impairment on available for sale securities - 2,755,600
Reversal of provision for potential losses on investments (1,737,786) (1,050,000)(15,227,194) 33,012,244
21 TAXATION
21.1 The tax charge for the current period has been made under the provisions of the Alternate Corporate Tax under Section 113C of the Income Tax Ordinance, 2001. The deferred tax calculated using the statutory rate of taxation has been charged to the profit and loss account.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
14 15
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
Name of lending Commencement Mode of loanRate institution of repayment repayment
December 31, June 302015 2015
Rupees(Un-audited) (Audited)
13 LONG TERM LOANS
Secured :Pakistan Poverty Alleviation Fund KIBOR+1.50% - 120,299,248
Unsecured :ECO Trade and Development Bank 149,714,373 290,571,518
Total long term loans 149,714,373 410,870,766Less: Current maturity (note 15) 149,714,373 410,870,766
- -
15 CURRENT MATURITY OF NON-CURRENT LIABILITIES
Current maturity of :Long term finances 12 3,502,316,682 3,294,389,094
Long term loans 13 149,714,373 410,870,766
Long term certificates of deposit 1,081,353,226 921,967,140Long term deposits 1,716,534,622 1,566,589,081
6,449,918,903 6,193,816,081
17 INCOME FROM OPERATING LEASE
11 quarterly instalments
June 28, 2013
US$ six month LIBOR+1.50%
7 equal semi annual
instalments
January 7, 2013
December 31, June 302015 2015
Rupees(Un-audited) (Audited)14 SHORT TERM BORROWINGS
From banking Companies :Running finance arrangements - secured 1,337,052,997 884,301,394Short term loans - secured 1,130,000,000 -
2,467,052,997 884,301,394
16 CONTINGENCIES AND COMMITMENTS
16.1 In November 2011, the Company received a show cause notice from the Large Taxpayers Unit of the Federal Board of Revenue (FBR) Karachi as to why Federal Excise Duty (FED) on mark-up and other income for the years ended June 30, 2008, 2009 and 2010 amounting to Rs. 1,126 million along with applicable penalty and default surcharge should not be recovered from the Company. The Company's legal advisor is of the opinion that charging of FED on mark-up based income is unlawful and accordingly the Company filed a suit before the Honorable High Court of Sindh challenging levy of FED on mark-up income. The Honorable High Court of Sindh in its order dated November, 19th, 2015 directed FBR to issue the notice of hearing and thereafter decide the matter. The Honorable High Court of Sindh further directed that recovery shall not be affected till the decision is made. Subsequent to the said order no notice from FBR for hearing has been received. Management, based on the merit of the case, consider that decision will be in the Company's favor hence no provision has been made in this regard.
16.2 There were no changes in the status of contingencies as disclosed in the note 31 to the financial statements for the year ended June 30, 2015 except as disclosed in note 16.1.
16.3 Finance lease and Ijarah contracts committed but not executed at the balance sheet date amounted to Rs 28.59 million (June 2015: Rs 28 million)
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
Generators and Vehicles 216,445,219 309,347,837
Islamic Finance 68,284,195 55,811,650284,729,414 365,159,487
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Note
18 SHARE OF PROFIT OF EQUITY ACCOUNTED UNDERTAKINGS
Quoted
Oman ORIX Leasing Company SAOG
Un-Quoted
Saudi ORIX Leasing Company
Al Hail ORIX Finance PSC
SK Leasing JSC 18.1ORIX Leasing Egypt SAE
730,364,665
730,364,665
1,281,716,167
(69,568,516)
-
86,555,265
1,298,702,916
2,029,067,581
85,026,862
85,026,862
24,673,036
(2,087,055)
-
19,907,711
42,493,692
127,520,554
659,829,757
659,829,757
1,583,860,822
429,493,272
-
74,822,275
2,088,176,369
2,748,006,126
76,815,401
76,815,401
30,489,321
12,884,799
-
17,209,123
60,583,243
137,398,644
Note
Half year ended December 31, 2015
Half year ended December 31, 2014
Name of associates
Rupees
Associates' Associates'
profit / (loss) profit / (loss)
after tax after tax
Share of Share ofassociates' associates'
profit / (loss) profit / (loss)after tax after tax
(Un-audited) (Un-audited)
18.1 The Company has suspended recognising share of profit on the said investment due to significant impediments in repatriation of capital / investment. However, the Company received a dividend of Rs 7,094,574, during the period.
19 FINANCE COST
Interest / mark-up on :
- Long term finances 340,389,972 325,748,761- Long term loans 9,400,521 41,926,412
- Short term borrowings 42,550,075 63,448,821
Profit on certificates of deposit 413,231,452 407,376,458Amortisation of transaction costs 7,296,344 9,188,088
Bank charges and commission 14,301,100 8,997,779827,169,464 856,686,319
20 OTHER PROVISIONS - NET
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
(Reversal) / provision for other receivable (22,489,408) 23,306,644
Provision for workers' welfare fund 9,000,000 8,000,000Impairment on available for sale securities - 2,755,600
Reversal of provision for potential losses on investments (1,737,786) (1,050,000)(15,227,194) 33,012,244
21 TAXATION
21.1 The tax charge for the current period has been made under the provisions of the Alternate Corporate Tax under Section 113C of the Income Tax Ordinance, 2001. The deferred tax calculated using the statutory rate of taxation has been charged to the profit and loss account.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
14 15
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
22 PROFIT / (LOSS) AFTER TAXATION FROM DISCONTINUED OPERATIONS
Income from operations 98,839,567 118,988,446
Direct cost (61,136,777) (63,035,878)
Administrative and general expenses (23,973,053) (22,572,562)
Impairment loss on e-business assets (30,670,015) -
Provision against debtors - (5,895,366)(Loss) / profit before taxation (16,940,278) 27,484,640
Taxation - net 2,879,847 (4,672,389)(Loss) / profit after taxation from discontinued operations (14,060,431) 22,812,251
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
The Company will be exiting its e-business segment in the near future. This business is not aligned to the Company's strategic objective of concentrating on its core leasing business. The existing technology available with the Company is obsolete and revenues are expected to decline further in the near future unless significant additional investment is made. In view of the above, an impairment loss of Rs.30.67 million has been recognized on the Company's e-business assets and these have been classified as held for sale at recoverable value.
23 SEGMENT INFORMATION
The Company has two primary reporting segments namely, ‘Finance lease’ and ‘Operating lease’, based on the nature of business and the related risks and returns associated with these segments. The finance lease operations are primarily for long term leases of movable assets to corporate entities and individuals, while under operating lease, the Company provides assets on short term rentals. Investment Financial Services represents ORIX Investment Bank Limited's assets and liabilities and related profit and loss expenses after amalgamation with ORIX Leasing Pakistan Limited. Segment results for the Company’s Micro Finance operation are also disclosed separately. Other operations, which are not deemed by management to be sufficiently significant to disclose as separate items and do not fall in to the above segment categories, are reported under "Investment in associates, loans and others".
TotalFinance
lease
Operating
lease
Leasing
business total
Micro
Finance
Investment in
associates, loans
and others
Investment
financial
services
Segment analysis for the half year
ended December 31, 2015 - (Unaudited)
Segment revenues
Share of profit of equity accounted
undertakings
Total segment revenue
Administrative and general expenses
Direct cost of lease
Allowance for potential lease
other loan losses - net
Impairment loss on e-business assets
Reversal of provision
Segment result
Provision for workers welfare fund
Unallocated expenses
Result from operating activities
Finance cost
Provision for taxation
Profit for the period
Segment assets and liabilities
Segment assets
Investment in equity
accounted undertakings
Asset classified as held for sale
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
1,153,889,716
-
1,153,889,716
(137,569,789)
(7,429,103)
(23,057,319)
-
985,833,505
21,906,935,264
-
5,751,887
7,571,128,252
383,568,981
-
383,568,981
(34,675,700)
(261,306,453)
(30,670,015)
20,389,408
77,306,221
1,252,060,849
-
32,000,000
-
272,148,095
127,520,554
399,668,649
(7,150,483)
(26,610,019)
1,403,603
367,311,750
3,518,475,785
2,284,473,758
87,754,399
-
1,809,606,792
127,520,554
1,937,127,346
(179,395,972)
(268,735,556)
(49,667,338)
(30,670,015)
21,793,011
1,430,451,476
(9,000,000)
(224,652,058)
1,196,799,418
(813,128,912)
(91,300,000)
292,370,506
26,677,471,898
2,284,473,758
125,506,286
947,869,983
30,035,321,925
7,571,128,252
19,166,605,168
26,737,733,420
72,382,915
-
72,382,915
(28,372,517)
-
(70,866)
-
43,939,532
-
-
43,939,532
(13,434,297)
-
30,505,235
409,001,366
-
-
-
409,001,366
148,085,562
-
148,085,562
246,804
-
246,804
-
-
-
2,434,183
2,680,987
-
-
2,680,987
(606,255)
-
2,074,732
13,094,627
-
-
-
13,094,627
13,094,627
-
13,094,627
1,882,236,511
127,520,554
2,009,757,065
(207,768,489)
(268,735,556)
(49,738,204)
(30,670,015)
24,227,194
1,477,071,995
(9,000,000)
(224,652,058)
1,243,419,937
(827,169,464)
(91,300,000)
324,950,473
27,099,567,891
2,284,473,758
125,506,286
947,869,983
30,457,417,918
7,732,308,441
19,166,605,168
26,898,913,609
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Rupees
TotalFinance
lease
Operating
lease
Leasing
business total
Micro
Finance
Investment in
associates, loans
and others
Investment
financial
services
Other informationCapital expenditure
Depreciation and amortisation
Unallocated:Capital expenditure
Depreciation and amortisation
Segment analysis for the half year
ended December 31, 2014 - (Unaudited)Segment revenuesShare of profit of equity accounted
undertakings
Total segment revenueAdministrative and general expenses
Direct cost of leaseAllowance for potential lease
other loan losses - net
Reversal of provision on investmentSegment result
Provision for workers welfare fund
Unallocated expenses
Result from operating activitiesFinance cost
Provision for taxationProfit for the period
Segment assets and liabilities for the yearended June 30, 2015 (Audited)
Segment assets
Investment in equity accounted undertakings
Assets classified as held for sale
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilitiesTotal liabilities
Other information for the half year
ended December 31, 2014 (Unaudited)Capital expenditure
Depreciation and amortisation
Unallocated:Capital expenditure
Depreciation and amortisation
-
-
-
-
1,083,455,953
-1,083,455,953
(134,649,997)
(4,581,739)
(69,632,574)
-874,591,643
20,102,572,381
-
3,547,810
6,804,332,299
-
-
-
-
68,159,515
118,978,971
-
-
484,147,933
-484,147,933
(37,597,218)
(312,194,706)
(29,202,010)
-105,153,999
1,375,712,515
-
-
-
77,030,074
129,960,369
-
-
-
-
-
-
282,795,076
137,398,644420,193,720
(25,118)
(7,488,743)
713,502413,393,361
3,202,785,328
2,176,352,899
87,754,399
-
-
-
-
-
68,159,515
118,978,971
42,041,056
24,624,754
1,850,398,962
137,398,6441,987,797,606
(172,272,333)
(316,776,445)
(106,323,327)
713,5021,393,139,003
(8,000,000)
(210,747,281)
1,174,391,722(833,565,757)
(91,396,087)249,429,878
24,681,070,224
2,176,352,899
91,302,209
945,359,503
27,894,084,835
6,804,332,299
17,806,793,88224,611,126,181
77,030,074
129,960,369
19,150,775
23,830,030
1,713,070
648,369
-
-
59,201,403
-59,201,403
(24,909,710)
-
(236,137)
-34,055,556
-
-
34,055,556(18,002,027)
-16,053,529
386,369,930
-
-
386,369,930
120,299,248
-120,299,248
1,121,390
798,621
-
-
-
-
-
-
62,538,233
-62,538,233
(801,839)
-
(538,617)
336,49861,534,275
-
-
61,534,275(5,118,535)
-56,415,740
37,192,637
-
-
-
37,192,637
37,192,637
-37,192,637
-
-
-
-
69,872,585
119,627,340
42,041,056
24,624,754
1,972,138,598
137,398,6442,109,537,242
(197,983,882)
(316,776,445)
(107,098,081)
1,050,0001,488,728,834
(8,000,000)
(210,747,281)
1,269,981,553(856,686,319)
(91,396,087)321,899,147
25,104,632,791
2,176,352,899
91,302,209
945,359,503
28,317,647,402
6,961,824,184
17,806,793,88224,768,618,066
78,151,464
130,758,990
19,150,775
23,830,030
24 TRANSACTIONS / BALANCES WITH RELATED PARTIES
The following table provides the detail of transactions and balances with related parties. Transactions with related parties are made in accordance with normal market prices. Transactions with key management personnel are in accordance with terms and conditions of their employment contracts.
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
Transactions during the period
ORIX Corporation, Japan
Parent Company
Dividend Paid 183,113,276 142,421,437
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Rupees
16 17
-
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
22 PROFIT / (LOSS) AFTER TAXATION FROM DISCONTINUED OPERATIONS
Income from operations 98,839,567 118,988,446
Direct cost (61,136,777) (63,035,878)
Administrative and general expenses (23,973,053) (22,572,562)
Impairment loss on e-business assets (30,670,015) -
Provision against debtors - (5,895,366)(Loss) / profit before taxation (16,940,278) 27,484,640
Taxation - net 2,879,847 (4,672,389)(Loss) / profit after taxation from discontinued operations (14,060,431) 22,812,251
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
The Company will be exiting its e-business segment in the near future. This business is not aligned to the Company's strategic objective of concentrating on its core leasing business. The existing technology available with the Company is obsolete and revenues are expected to decline further in the near future unless significant additional investment is made. In view of the above, an impairment loss of Rs.30.67 million has been recognized on the Company's e-business assets and these have been classified as held for sale at recoverable value.
23 SEGMENT INFORMATION
The Company has two primary reporting segments namely, ‘Finance lease’ and ‘Operating lease’, based on the nature of business and the related risks and returns associated with these segments. The finance lease operations are primarily for long term leases of movable assets to corporate entities and individuals, while under operating lease, the Company provides assets on short term rentals. Investment Financial Services represents ORIX Investment Bank Limited's assets and liabilities and related profit and loss expenses after amalgamation with ORIX Leasing Pakistan Limited. Segment results for the Company’s Micro Finance operation are also disclosed separately. Other operations, which are not deemed by management to be sufficiently significant to disclose as separate items and do not fall in to the above segment categories, are reported under "Investment in associates, loans and others".
TotalFinance
lease
Operating
lease
Leasing
business total
Micro
Finance
Investment in
associates, loans
and others
Investment
financial
services
Segment analysis for the half year
ended December 31, 2015 - (Unaudited)
Segment revenues
Share of profit of equity accounted
undertakings
Total segment revenue
Administrative and general expenses
Direct cost of lease
Allowance for potential lease
other loan losses - net
Impairment loss on e-business assets
Reversal of provision
Segment result
Provision for workers welfare fund
Unallocated expenses
Result from operating activities
Finance cost
Provision for taxation
Profit for the period
Segment assets and liabilities
Segment assets
Investment in equity
accounted undertakings
Asset classified as held for sale
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilities
Total liabilities
1,153,889,716
-
1,153,889,716
(137,569,789)
(7,429,103)
(23,057,319)
-
985,833,505
21,906,935,264
-
5,751,887
7,571,128,252
383,568,981
-
383,568,981
(34,675,700)
(261,306,453)
(30,670,015)
20,389,408
77,306,221
1,252,060,849
-
32,000,000
-
272,148,095
127,520,554
399,668,649
(7,150,483)
(26,610,019)
1,403,603
367,311,750
3,518,475,785
2,284,473,758
87,754,399
-
1,809,606,792
127,520,554
1,937,127,346
(179,395,972)
(268,735,556)
(49,667,338)
(30,670,015)
21,793,011
1,430,451,476
(9,000,000)
(224,652,058)
1,196,799,418
(813,128,912)
(91,300,000)
292,370,506
26,677,471,898
2,284,473,758
125,506,286
947,869,983
30,035,321,925
7,571,128,252
19,166,605,168
26,737,733,420
72,382,915
-
72,382,915
(28,372,517)
-
(70,866)
-
43,939,532
-
-
43,939,532
(13,434,297)
-
30,505,235
409,001,366
-
-
-
409,001,366
148,085,562
-
148,085,562
246,804
-
246,804
-
-
-
2,434,183
2,680,987
-
-
2,680,987
(606,255)
-
2,074,732
13,094,627
-
-
-
13,094,627
13,094,627
-
13,094,627
1,882,236,511
127,520,554
2,009,757,065
(207,768,489)
(268,735,556)
(49,738,204)
(30,670,015)
24,227,194
1,477,071,995
(9,000,000)
(224,652,058)
1,243,419,937
(827,169,464)
(91,300,000)
324,950,473
27,099,567,891
2,284,473,758
125,506,286
947,869,983
30,457,417,918
7,732,308,441
19,166,605,168
26,898,913,609
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Rupees
TotalFinance
lease
Operating
lease
Leasing
business total
Micro
Finance
Investment in
associates, loans
and others
Investment
financial
services
Other informationCapital expenditure
Depreciation and amortisation
Unallocated:Capital expenditure
Depreciation and amortisation
Segment analysis for the half year
ended December 31, 2014 - (Unaudited)Segment revenuesShare of profit of equity accounted
undertakings
Total segment revenueAdministrative and general expenses
Direct cost of leaseAllowance for potential lease
other loan losses - net
Reversal of provision on investmentSegment result
Provision for workers welfare fund
Unallocated expenses
Result from operating activitiesFinance cost
Provision for taxationProfit for the period
Segment assets and liabilities for the yearended June 30, 2015 (Audited)
Segment assets
Investment in equity accounted undertakings
Assets classified as held for sale
Unallocated assets
Total assets
Segment liabilities
Unallocated liabilitiesTotal liabilities
Other information for the half year
ended December 31, 2014 (Unaudited)Capital expenditure
Depreciation and amortisation
Unallocated:Capital expenditure
Depreciation and amortisation
-
-
-
-
1,083,455,953
-1,083,455,953
(134,649,997)
(4,581,739)
(69,632,574)
-874,591,643
20,102,572,381
-
3,547,810
6,804,332,299
-
-
-
-
68,159,515
118,978,971
-
-
484,147,933
-484,147,933
(37,597,218)
(312,194,706)
(29,202,010)
-105,153,999
1,375,712,515
-
-
-
77,030,074
129,960,369
-
-
-
-
-
-
282,795,076
137,398,644420,193,720
(25,118)
(7,488,743)
713,502413,393,361
3,202,785,328
2,176,352,899
87,754,399
-
-
-
-
-
68,159,515
118,978,971
42,041,056
24,624,754
1,850,398,962
137,398,6441,987,797,606
(172,272,333)
(316,776,445)
(106,323,327)
713,5021,393,139,003
(8,000,000)
(210,747,281)
1,174,391,722(833,565,757)
(91,396,087)249,429,878
24,681,070,224
2,176,352,899
91,302,209
945,359,503
27,894,084,835
6,804,332,299
17,806,793,88224,611,126,181
77,030,074
129,960,369
19,150,775
23,830,030
1,713,070
648,369
-
-
59,201,403
-59,201,403
(24,909,710)
-
(236,137)
-34,055,556
-
-
34,055,556(18,002,027)
-16,053,529
386,369,930
-
-
386,369,930
120,299,248
-120,299,248
1,121,390
798,621
-
-
-
-
-
-
62,538,233
-62,538,233
(801,839)
-
(538,617)
336,49861,534,275
-
-
61,534,275(5,118,535)
-56,415,740
37,192,637
-
-
-
37,192,637
37,192,637
-37,192,637
-
-
-
-
69,872,585
119,627,340
42,041,056
24,624,754
1,972,138,598
137,398,6442,109,537,242
(197,983,882)
(316,776,445)
(107,098,081)
1,050,0001,488,728,834
(8,000,000)
(210,747,281)
1,269,981,553(856,686,319)
(91,396,087)321,899,147
25,104,632,791
2,176,352,899
91,302,209
945,359,503
28,317,647,402
6,961,824,184
17,806,793,88224,768,618,066
78,151,464
130,758,990
19,150,775
23,830,030
24 TRANSACTIONS / BALANCES WITH RELATED PARTIES
The following table provides the detail of transactions and balances with related parties. Transactions with related parties are made in accordance with normal market prices. Transactions with key management personnel are in accordance with terms and conditions of their employment contracts.
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
Transactions during the period
ORIX Corporation, Japan
Parent Company
Dividend Paid 183,113,276 142,421,437
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
Rupees
16 17
-
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
Saudi Orix Leasing Company
Associate / Common directorship
Investment through right shares (2014: 250,000 shares) - 67,375,000
Consultancy fee received 450,034 -
SK Leasing JSC
Associate / Common directorship
Dividend received 7,094,574 8,603,614
Oman ORIX Leasing Company SAOG
Associate / Common directorship
Dividend received 71,684,055 -
BOD attendance fee received 341,151 130,091
OPP (Private) Limited
Common directorship
Rent paid for serviced apartments - 38,512
Sui Northern Gas Company Limited
Common directorship
Utilities bills payment 5,430 10,170
State life Insurance Corporation of Pakistan
Common directorship
Rent and premium payment 6,834,813 4,672,856
Related parties
Issuance of certificates of deposit ** 11,004,668 27,972,860
Redemption of certificates of deposit ** 20,900,000 179,851
Amount of profit paid ** 2,940,910 1,539,864
ORIX Leasing Pakistan Limited Employees Provident Fund (OLP - EPF)
Contribution made 10,921,349 10,029,440
ORIX Leasing Pakistan Limited Staff Gratuity Fund (OLP - SGF)
Contribution made 6,000,008 9,900,000
Compensation of Key Management Personnel
Remuneration ** 72,018,898 61,113,563
Retirement benefits ** 5,942,987 5,991,791
77,961,885 67,105,354
Loan disbursement to key management personnel ** 3,938,235 7,493,360
Interest paid by key management personnel ** 1,044,150 1,115,736
Principal repaid by key management personnel ** 6,090,173 3,485,988
** Key Management personnel include the Chief Executive Officer, Chief Financial Officer, Company Secretary and departmental, divisional, zonal and functional heads. Previously, the Company had considered the Chief Executive Officer and the Chief Financial Officer as Key Management personnel. The comparative information has been restated accordingly.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited)
December 31, June 30,2015 2015
Half year ended
Rupees(Un-audited) (Audited)
Balances as at period / year end
Certificates of deposit held - Related parties 62,083,287 71,978,619
Accrued profit on certificates of deposit - Related parties 4,694,128 3,668,637
Loans to Key Management Personnel 36,768,951 37,469,419
Defined benefit payable to ORIX Leasing Pakistan Limited Staff Gratuity Fund - 849,197
24.2
25 CASH AND CASH EQUIVALENTS
Cash at bank 166,171,221 105,002,112
Cash in hand 1,448,694 1,261,628
167,619,915 106,263,740Running finance arrangements - secured (1,337,052,997) (1,201,355,539)
(1,169,433,082) (1,095,091,799)
Internal Audit also provides certain Internal Audit Advisory services to the ORIX Group Companies.
24.1 The Company is a party to Technical Assistance Agreements with its foreign associates, under which the Company renders certain technical services to these foreign associates.
26 FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
Level 1 : Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 : Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy into which the fair value measurement is categorised:
Level 1 Level 2 Level 3 Total
On balance sheet financial instruments
Financial assets measured at fair value
- Investments
At fair value through profit or loss - Available for sale investments - Total -
545,463,638621,678,438
1,167,142,076
545,463,638606,618,771
1,152,082,409 15,059,667
15,059,667
- 545,463,638621,678,438
1,167,142,076
Carrying value
December 31, 2015 (un-audited)
Fair value
Rupees
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
(Un-audited)
18 19
-
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited) (Un-audited)
Saudi Orix Leasing Company
Associate / Common directorship
Investment through right shares (2014: 250,000 shares) - 67,375,000
Consultancy fee received 450,034 -
SK Leasing JSC
Associate / Common directorship
Dividend received 7,094,574 8,603,614
Oman ORIX Leasing Company SAOG
Associate / Common directorship
Dividend received 71,684,055 -
BOD attendance fee received 341,151 130,091
OPP (Private) Limited
Common directorship
Rent paid for serviced apartments - 38,512
Sui Northern Gas Company Limited
Common directorship
Utilities bills payment 5,430 10,170
State life Insurance Corporation of Pakistan
Common directorship
Rent and premium payment 6,834,813 4,672,856
Related parties
Issuance of certificates of deposit ** 11,004,668 27,972,860
Redemption of certificates of deposit ** 20,900,000 179,851
Amount of profit paid ** 2,940,910 1,539,864
ORIX Leasing Pakistan Limited Employees Provident Fund (OLP - EPF)
Contribution made 10,921,349 10,029,440
ORIX Leasing Pakistan Limited Staff Gratuity Fund (OLP - SGF)
Contribution made 6,000,008 9,900,000
Compensation of Key Management Personnel
Remuneration ** 72,018,898 61,113,563
Retirement benefits ** 5,942,987 5,991,791
77,961,885 67,105,354
Loan disbursement to key management personnel ** 3,938,235 7,493,360
Interest paid by key management personnel ** 1,044,150 1,115,736
Principal repaid by key management personnel ** 6,090,173 3,485,988
** Key Management personnel include the Chief Executive Officer, Chief Financial Officer, Company Secretary and departmental, divisional, zonal and functional heads. Previously, the Company had considered the Chief Executive Officer and the Chief Financial Officer as Key Management personnel. The comparative information has been restated accordingly.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
December 31, December 31,2015 2014
Half year ended
Rupees(Un-audited)
December 31, June 30,2015 2015
Half year ended
Rupees(Un-audited) (Audited)
Balances as at period / year end
Certificates of deposit held - Related parties 62,083,287 71,978,619
Accrued profit on certificates of deposit - Related parties 4,694,128 3,668,637
Loans to Key Management Personnel 36,768,951 37,469,419
Defined benefit payable to ORIX Leasing Pakistan Limited Staff Gratuity Fund - 849,197
24.2
25 CASH AND CASH EQUIVALENTS
Cash at bank 166,171,221 105,002,112
Cash in hand 1,448,694 1,261,628
167,619,915 106,263,740Running finance arrangements - secured (1,337,052,997) (1,201,355,539)
(1,169,433,082) (1,095,091,799)
Internal Audit also provides certain Internal Audit Advisory services to the ORIX Group Companies.
24.1 The Company is a party to Technical Assistance Agreements with its foreign associates, under which the Company renders certain technical services to these foreign associates.
26 FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:
Level 1 : Fair value measurements using quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : Fair value measurements using inputs other than quoted prices included within Level 1 that are observable for the assets or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 : Fair value measurements using input for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
The table below analyses financial instruments measured at the end of the reporting period by the level in the fair value hierarchy into which the fair value measurement is categorised:
Level 1 Level 2 Level 3 Total
On balance sheet financial instruments
Financial assets measured at fair value
- Investments
At fair value through profit or loss - Available for sale investments - Total -
545,463,638621,678,438
1,167,142,076
545,463,638606,618,771
1,152,082,409 15,059,667
15,059,667
- 545,463,638621,678,438
1,167,142,076
Carrying value
December 31, 2015 (un-audited)
Fair value
Rupees
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)For the half year ended December 31, 2015
(Un-audited)
18 19
-
HALF YEARLY REPORT 2015-2016 / ORIX Leasing Pakistan Limited
27 GENERAL
Figures have been rounded off to the nearest rupee.
28 DATE OF AUTHORISATION FOR ISSUE
This condensed interim financial information was authorised for issue on February 22, 2016 by the Board of Directors of the Company.
Notes to and Forming Part of the Condensed Interim Financial Information (Un-audited)
ChairmanShaheen Amin Kunwar IdrisChief Executive
For the half year ended December 31, 2015
On balance sheet financial instruments
Financial assets measured at fair value
- Investments
At fair value through profit or loss - Available for sale investments - Total
482,523,845631,419,064
1,113,942,909 -
482,523,845616,133,538
1,098,657,383
15,285,52615,285,526
- 482,523,845631,419,064
1,113,942,909
June 30, 2015 (Audited)
Level 1 Level 2 Level 3 Total
Carrying value Fair value
Rupees
The carrying amounts of all other financial assets and liabilities reflected in the financial statements approximate their fair values.
20
-